The EU’s commitment to green energy policies amid the coronavirus pandemic is an example for all economic regions.
European commitment to the protection of green energy policies has been strong
The European Union Council has confirmed that its fiscal response to the Covid-19 pandemic will not neglect the Green Deal; its plan to become carbon neutral by 2050.
The Covid-19 pandemic has put immense strain on the global economy, and the impact of the virus has not discriminated based on economic size or strength. A decline in carbon emissions has accompanied the sharp reduction in economic activity. As economic regions recover, they are unlikely to place the same value on the importance of green investments.
European policies will ensure sustainable development and bolster the renewables industry
Integrating the green energy transition and digital transformation into Europe’s economic recovery could be crucial for long-term economic strength. Covid-19 stimulus packages from the block will likely insist on compliance with sustainability goals. This condition could prove critical and give the continent an advantage over other economic regions, where the speed of recovery is of greater importance than its sustainability.
The continued commitment of the EU to green principles could prove vital for the recovery of the renewables industry worldwide, which is facing a number of struggles. The depressed economic activity in China has led to supply chain shortages in the solar energy industry. The country leads global solar module manufacturing, but factory closures have resulted in supply chain disruptions worldwide. GlobalData expects the Covid-19 outbreak to contract annual solar installed capacity in China by roughly 17% of pre-pandemic estimates. Support for local renewable companies from the EU could be a lifeline for the recovery of the sector worldwide.
Simultaneously, carbon prices have declined drastically from an 11 year high of $30.46 per tonne in the summer of 2019, to $16.32 per tonne. Renewable energies had previously overtaken fossil fuels as the most affordable energy source. However, this may be threatened if oil and gas prices remain low. Enterprises are unlikely to adopt renewable energy during a recession, particularly if the price is no longer competitive.
Maintaining green policy commitments will strengthen long-term economic positions
Invariably, carbon prices will rise again. If the EU has integrated the Green Deal and a carbon emission plan into its recovery packages, it will be in a stronger long-term position than other regions. Rebuilding the economy around green principles will insulate the region from the volatility of fossil fuel prices and encourage sustainable growth.
The unintended environmental consequences of the ranging economic shutdowns caused by Covid-19, including declines in carbon emissions, have been widely discussed. Rebuilding the economy on carbon-emitting fuels, and neglecting green ambitions would be a mistake. If anything, the pause in the global economy gives us an opportunity to rebuild with sustainable principles rather than racing to economic recovery at the expense of longevity. The EU’s commitment to green principles in the Covid-19 recovery period should be an example to all nations.